Easy Ways to Increase Revenue and Profits with Little and Preferably No Effort

I am frequently asked how agencies can increase their revenue per person. Since all agencies are basically the same, I have developed a three step program that is sure to help every agency increase this all important metric.

Step 1: Abandon Service

Think about how much more money an agency can make if its customer service representatives (CSR) do not service clients. If the agency just renews all policies as is, the agency probably can eliminate 20 percent of its CSRs. So if an agency’s CSRs are servicing $250,000 in commission each today, eliminating renewal policy review can result in each remaining CSR servicing $300,000.

Step 2: Do Not Discuss Coverages

Next, do not waste time discussing coverages. Just give the client what the client requests without regard for how insufficient their requests may be. This step has an added benefit; the client never thinks you are selling them coverage they do not really need. The result is you will be held in greater esteem by the client.

The benefits do not end there. You do not have to answer stupid questions about how coverages apply nearly as often and you do not have to get frustrated explaining why certain coverages are necessary. You do not even have to deal with explaining why — just because the law requires certain coverages and limits be purchased — you cannot legally sell policies or coverages with the limits the insured is requesting. After all, this is America, home of capitalism, and if someone wants to forego uninsured motorist insurance, they should be allowed to do so.

Think about all the time the agency will save. Plus, office morale will greatly increase. With more time, more profits, and the agency’s revenue per person rising above best practices levels, the agency will have more to celebrate too. Then it can make the cover of an insurance publication and become famous for its profits, its efficiency, and its parties (P.E.P. for short because all great success stories need a good acronym).

Step 3: Only Positive Energy

I am sure there are some readers concerned about retention, sales, and errors and omissions (E&O) claims resulting from these first two simple but effective steps. Such negative energy only invites bad retention, poor sales, and E&O claims. Most agencies do not incur E&O claims every year even if they are real screwballs so agencies are just wasting time, money, and energy by taking the steps recommended by their E&O carriers, instructors, and consultants. It is so much easier and requires so much less effort to just think positively.

Send out positive vibes in a 360 degree arc. Every good salesperson knows great sales are about positive energy. A producer does not really have to know coverages. So much less energy is required when a person just thinks positively. Too much negative energy is required developing and following proper procedures. Think too about all the time saved not studying coverages!

Positive energy will take care of uncovered claims too, making coverage knowledge an even more moot point. With enough positive energy, companies will pay for claims their policies do not cover.

This saves a lot of time and money too. I estimate agencies can save at least 20 percent when completely implemented.

To speed the process, an agency might have to purchase certain mood enhancing organic chemicals that are easily obtained today and might even become a niche market. This accelerated approach slightly diminishes the initial profitability, but it’s such a small price.

One of the greatest energy consumers in agencies is the constant battle between CSRs and producers. CSRs want the job done right and producers are constantly trying to take shortcuts. Just get the sale and don’t confuse them or the client with extra procedures, paperwork, coverage checklists, etc.

Positive thinking, as previously explained, completely obviates the need for this conflict. When such conflict ceases, all parties have more time to write more business. This is a key to growing faster.

You have seen many insurance carriers grow fast through the years by ignoring good underwriting rules. Some of these carriers even appeared on the covers of magazines as the featured growth stock! Learn from your carriers! Many now claim to have the greatest underwriting/pricing models ever developed negating the need to underwrite in the traditional sense. This allows them to write new business at 40 percent less than the expiring policy and still make money. I really do not know why more agents do not understand that abandonment of all rules makes so much good sense.

Many companies did invest a lot of money in their rating/underwriting software so this wasn’t the fastest way to greater profits. Since agencies do not have to invest nearly as much in software, the key here is thinking positively and over simplistically.

I should not say “over” simplistically because the insurance world is not more complex than it was 20 years ago, not really. So it is impossible to over simplify how to manage an agency, its employees, its carrier relationships, and customer relationships. When everyone is happy, what is there to manage?

As an example, on Discovery Channel’s “Deadliest Catch” the captains were discussing how bad morale was — until they started catching crab. As long as they were catching a lot of crab, morale was great and nothing went wrong even when the crew was working 24-hour days. This is a great lesson.

All an agency has to do is write business, think positively and not provide detailed, professional service. Then the agency’s revenues will be high and everyone will be happy. The competition will be blind-sided by your success. Heck, all their employees will be applying for jobs at your agency. Your agency will be a magnet for all the producers in a 50-mile radius that do not want to follow their current agencies’ silly rules. This is just another benefit. You will never have to be concerned again about finding good producers! See, thinking positively solves everything!

Just follow these three simple steps and your revenues and revenue per person will be beyond compare!

Topics Agencies Profit Loss Professional Liability